National Insurance Explained: What NI Is and When You Pay It
National Insurance is a payroll deduction most employees start paying once earnings pass the NI threshold. In 2026/27, employees usually pay 8% in the main band and 2% above the upper earnings limit, so this page explains when NI starts and how it changes with pay.
Use this page as a practical NI explainer first and a calculator companion second. It is designed to help you understand when NI starts, what affects it and why deductions change across salaries.
NI is separate from income tax.
Thresholds and rates can change by tax year.
Continue reading for the rules, examples and common questions.
Calculator
Salary
True wage
Compare
Bonus
2026/27 uses main employee NI rate 8%.
Scotland uses different income tax bands.
Choose how you’re paid.
£
Gross pay before tax/NI.
£
Gross hourly pay.
Used for hourly + True Wage time.
Set to 46–48 if you want to exclude holidays.
%
Optional: percent of salary.
Salary sacrifice pensionIf on, pension reduces taxable pay and NI (simplified).
Assumptions▼
Standard personal allowance (simplified).
Does not include student loans, benefits-in-kind, child benefit tax charge, etc.
NI in 2023/24 changed mid-year; we model a split-year weekly estimate (illustrative).
Counts both directions. Set 0 if remote.
£
£
Lunches, parking, clothes, tools, etc.
£
Employer-paid perks that reduce your costs.
Tip: leave any field at 0 if it doesn't apply. Use the placeholders (e.g. 30, 3, £25) as examples of format.
Compare uses your current True Wage inputs for both salaries (same commute/cost assumptions).
£
Estimated using your current salary + tax year + region.
Bonus is taxed at your marginal rates (illustrative).
Bonus after tax (estimate)▼
Item
Amount
Net bonus
£—
Note: This is an illustrative estimate. Payroll can withhold differently depending on pay period and coding.
Illustrative estimate onlyResults are indicative. Check payslips or payroll information for final deductions.
National Insurance explained (2026/27)
National Insurance (NI) is separate from Income Tax. It’s usually deducted through PAYE and contributes to things like the NHS and State Pension.
Even if two salaries fall into the same tax band, NI can still change your take-home pay — especially above key thresholds.
Use the calculator above for an estimate, then switch to True Wage to factor in commute time, costs and unpaid overtime.
How employee NI works (simplified)
Below the NI threshold: you typically pay no employee NI.
Main rate: a percentage applies to earnings within the main NI band.
Upper rate: a lower percentage applies above the upper earnings limit.
NI depends on your situationNI can vary by category, pay frequency, and certain benefits. PayPrecise provides illustrative estimates designed for clarity and speed.
Why NI matters for “true” take-home pay
Most people focus on Income Tax, but NI is another major deduction. Once you add real-world costs (commuting, lunches/coffee, tools, unpaid overtime),
your real hourly pay can be meaningfully different — that’s the point of True Wage.
Calculator outputs remain illustrative because tax codes, salary sacrifice, pension settings, benefits, commuting patterns and local costs vary by person.